The decentralised Bitcoin Hash Rate Futures offered by SynFutures are designed to allow miners to speculate on or short Bitcoin mining difficulties.
Decentralized derivatives trading platform SynFutures has introduced a new product called Bitcoin (BTC) Hash Rate Futures, which uses the ever-changing mining difficulty of the world’s most popular cryptocurrency as a basis for opening long or short bets.
SynFutures’ new service, which it describes as “fully decentralised hash rate futures,” would allow customers to bet on the difficulty of Bitcoin mining with Wrapped BTC (wBTC).
The hash rate and mining difficulty are two fundamental Bitcoin mechanics that have grown in popularity as a result of the exodus of Bitcoin miners from China following the government crackdown.
Every 2,016 blocks, the Bitcoin network demands that the mining difficulty be adjusted in order to keep up with the Bitcoin hash rate, which is the amount of processing power committed to mining.
According to Cointelegraph’s in-depth explanation, this two-way process ensures that the block time, or the amount of time it takes to find each new block, remains consistent while mining Bitcoin.
According to the statement, SynFutures built the Hash Rate Futures, which is now in closed alpha, by building an oracle that can directly validate Bitcoin block headers and extract the mining difficulty from the block headers.
During a difficulty resetting period at a given difficulty level, each futures contract reflects the predicted block mining reward in bitcoins (BTC) for a given time period.
Shorting Hash Rate Futures would allow miners to hedge against the risk of mining difficulty rises, whereas longing energy futures would allow them to calculate the cost of electricity.
Rachel Lin, the founder and CEO of SynFutures, stated that the team’s goal was to enable traders to hedge against all of the factors that could affect their mining results. She went on to say:
“There hasn’t been a derivatives product targeting mining difficulty, which is vital to a miner knowing how much return their rigs are going to generate. With Hash Rate Futures, we’re filling in this gap for miners.”
Earlier this month, SynFutures raised $14 million in a Series A investment round led by Polychain Capital, with participation from a number of other famous crypto investors, including Pantera Capital, Framework, and Wintermute, as well as existing investors.